BLACKROCK NEW ENERGY INVESTMENT TRUST plc
All information is at 31 December 2013 and unaudited.
Performance at month end with net income reinvested
One Three Six One Five Since launch
Month Months Months Year Years (23 Oct 00)
Net asset value
(Undiluted) 1.1% 3.2% 8.2% 25.6% 0.1% -51.5%
Share price -0.1% 8.0% 15.8% 33.1% 13.1% -55.9%
Source: BlackRock
At month end
Net asset value - capital only: 45.80p
Net asset value - cum income: 45.80p
Share price: 43.50p
Discount to cum income NAV*: 5.02%
Subscription share price: 0.25p
Net yield** 0.52%
Total assets including current year revenue: £107.6m
Gearing: Nil
Ordinary shares in issue: 234,988,568
Subscription shares in issue: 45,611,243
* Discount to NAV based on cum income undiluted NAV.
** Based on an interim dividend of 0.225p per share in respect of the year
ended 31 October 2013. The shares were marked ex-dividend on 23 December 2013
and the dividend is payable on 24 January 2014.
Benchmark
Sector Analysis Total Assets (%) Country Analysis Total Assets (%)
Energy Efficiency 28.8 USA 33.8
Enabling Energy & Infrastructure 26.4 Denmark 9.6
Renewable Energy Developers 17.4 China 7.6
Alternative Fuels 12.4 France 6.9
Renewable Energy Technology 10.4 United Kingdom 6.4
Net current assets 4.6 Germany 5.7
----- Canada 5.3
100.0 Switzerland 3.8
===== Portugal 3.7
Ireland 2.4
Italy 2.3
South Africa 2.1
Finland 2.0
Belgium 1.7
Australia 1.4
Japan 0.7
Net current assets 4.6
-----
100.0
=====
Ten Largest Investments (in alphabetical order)
Company Country of Risk
ABB Reg Switzerland
EDP Renovaveis Portugal
ITC Holdings USA
Johnson Controls USA
Johnson Matthey United Kingdom
NextEra Energy USA
Novozymes Denmark
Regal Beloit USA
Schneider Electric France
Vestas Wind Systems Denmark
Robin Batchelor and Poppy Allonby, representing the Investment Manager, noted:
The NAV of the Company rose by 1.1% in December.
For reference, the MSCI World Index gained 1.0% and the WilderHill New Energy
Global Innovations, an index that is representative of the sector, fell by 0.2%
(Datastream, in sterling terms).
Markets responded positively to the long awaited announcement that the Fed
would begin their withdrawal of monetary stimulus. Fed Chairman Ben Bernanke
stated that the decision reflects, "cumulative progress" in the US economy and
"an improved outlook for the US job market."
On December 6, the European Union's (EU) two year anti-dumping and anti-subsidy
measures came into effect on some Chinese solar panels. Following complaints
from the European Solar industry, the EU launched an investigation that found
Chinese companies were selling solar panels at lower than normal market prices
after receiving illegal subsidies. The European Commission stated in a press
release, "Unfair trade in solar panels does not help the environment and is not
compatible with a healthy global solar industry."
Performance
Electricity transmission company ITC contributed positively to performance
despite announcing that their planned merger with Entergy Corp would not go
ahead. The firm's shares performed strongly on the back of the market's
positive expectations for the stand alone business. After spending two years
working towards the deal, ITC and Entergy released a joint statement citing
regulatory opposition as the cause of the deal's collapse.
Biotech company, Novozymes, also aided returns as investors reacted positively
to the 'BioAg Alliance' the firm formed with Monsanto. The BioAg Alliance is,
"dedicated to fundamentally enhancing research and development of naturally
derived microbial technology to increase productivity of the world's crops."
Solar companies experienced some profit taking by investors during the month
following strong performance from the subsector in 2013. While the Company has
limited exposure to the solar sector, a number of the solar holdings in the
Company detracted from performance in December.
Portfolio Activity
We exited two renewable energy developers owing to increased political risk. We
also initiated a position in an energy efficiency company.
Outlook
The Company has been positioned to benefit from areas of the New Energy sector
that are experiencing strong near-term growth.
The pain that the Renewable Energy Technology sub-sector has suffered is
showing little sign of imminent relief despite some recent positive newsflow.
The price of a solar module has fallen by approximately 70% from the start of
2009 rendering many producers loss making, and, despite demand growth, the
industry remains over-supplied. We continue to believe that consolidation is
required to create a sustainable industry. We remain cautious on investment in
the space and continue to prefer opportunities among the Renewable Energy
developers.
At the other end of the spectrum, and with some positive momentum due to a more
optimistic industrial outlook, lie the Enabling Energy and Infrastructure
companies and certain Energy Efficiency players who are enjoying bumper growth.
The natural gas revolution and power grid expansion in the US has sparked an
investment up-cycle in energy infrastructure spending which continues to gather
momentum. Energy Efficiency has also benefitted from corporate and government
cost saving - legislation to incentivize the adoption of energy efficiency
technology is a more appealing option to a cash strapped government than
renewable energy subsidy.
We believe that sector valuations are generally attractive, both relative to
history and to broader equity markets, and there is scope for the positive
sector fundamentals to be supported by continued M&A.
The Company announced on 19 December 2013 that it had issued a circular (the
"Circular") to its shareholders ("Shareholders") in connection with recommended
proposals for the reconstruction and winding up of the Company (the
"Proposals").
The Proposals
Under the Proposals, which will be effected by way of a scheme of
reconstruction of the Company under section 110 of the Insolvency Act 1986,
Shareholders will be able to elect:
- to realise all or some of their investment in the Company for cash (the
"Cash Option"); and/or
- subject to the Rollover Condition being met, to roll over all or some of
their investment into shares of the New Energy Fund, a sub-fund of
BlackRock Global Funds, a public limited company established under the laws
of the Grand Duchy of Luxembourg as an open-ended variable capital
investment company (the "New Energy Rollover Option").
The Board has determined that Shareholders who do not elect for the New Energy
Rollover Option should receive cash. Shareholders who do not make a valid
Election will be deemed to have elected for the Cash Option in respect of their
entire holding of Shares.
Restricted Persons will not be provided with a Form of Election and will be
deemed to have made an Election for cash unless they are able to satisfy the
Company and the Management Company that they are permitted to hold New Energy
Fund Shares without breaching the laws of any relevant jurisdictions.
The Circular contains details of the action which Shareholders should take in
order to make an election for New Energy Fund Shares under the Proposals. If
your Shares are held through one of the Savings Schemes, you should take the
action set out in the section headed "Savings Scheme Participants" in Part II
of the Circular.
Subscription Shareholders
Pursuant to the Proposals, Subscription Shareholders will have a fixed
entitlement per Subscription Share calculated in accordance with Article 13.3.9
of the Articles of Association (the Subscription Share Entitlement). The
Subscription Share Entitlement will be calculated by reference to the middle
market quotations (as derived from the Official List) for one Subscription
Share for the 10 consecutive dealing days ending on the date on which the
Proposals were announced, being 13 December 2013, and will be paid out of the
Liquidation Fund on or following the Effective Date.
General Meetings
The implementation of the Proposals will require Shareholders to vote in favour
of resolutions to be proposed at the Meetings which have been convened for
2 p.m. on 21 January 2014, 12.15 p.m. on 6 February 2014 and 9.30 a.m. on
14 February 2014. The notices convening the Meetings are set out in the
Circular. The Meetings will be held at the offices of BlackRock Investment
Management (UK) Limited, 12 Throgmorton Avenue, London EC2N 2DL.
17 January 2014
ENDS
Latest information is available by typing www.brneplc.co.uk on the internet,
"BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal). Neither the contents of the Manager's website nor the contents of
any website accessible from hyperlinks on the Manager's website (or any other
website) is incorporated into, or forms part of, this announcement.